The Funnel - Special Edition | Israel Innovation at Glance by The Funnel | Corporate Innovation Magazine by Spyre Group

israel’s corporate innovation magazine

Israel Innovation at Glance 16 MUNICIPAL INNOVATION IN TEL-AVIV 20 FROM PORT TO PORTAL THE PORT OF ASHDOD 24 THE KITCHEN: OPEN INNOVATION AT STRAUSS GROUP

Special 74th Israel Independence Day issue

OPEN INNOVATION IS GREAT. WHAT ABOUT INTERNAL READINESS?

FROM PORT TO PORTAL THE PORT OF ASHDOD

CUSTOMER ORIENTED INNOVATION AT AMDOCS

THE KITCHEN: OPEN INNOVATION AT STRAUSS GROUP

THE SECRET KILLER OF CORPORATE INNOVATION LACK OF OPERATIONAL FIT

NETIVIEI ISRAEL OPEN INNNOVATION

MUNICIPAL INNOVATION THE STORY OF A MUNICIPALITY’S SYSTEMATIC APPROACH TO INNOVATION IN TEL-AVIV

GROUP GENIUS INTRAPRENEURSHIP IMPACTING TANGIBLE OUTCOMES AT ORBIA

EDITOR’S NOTES

To our dear readers, Israel is celebrating its independence day and we thought it would be a great idea to look back at some of the fascinating innovation activities taking place at various Israeli organizations that we featured in our magazine over the years. From state-owned enterprises such as Netivei Israel, in charge of most of Israel’s transportation infrastructure, via Strauss group, which is among the largest food products manufacturers in Israel and all the way to the municipality of Tel-Aviv, systematic innovation is becoming part of the foundation for organizations across Israel. So raise your glass to Israel and wish it a happy birthday. After reading this special independence day edition I’m sure you will be convinced as we are that the startup nation is also becoming the corporate innovation nation. Best regards,

Ahi Gvirtsman

Chief Editor & Spyre Global Partner

BY ELENA DONETS, CO-FOUNDER AND COO AT SPYRE. ELENA IS A LEADER IN ISRAEL’S ENTREPRENEURSHIP ECO-SYSTEM AND A MEMBER OF THE G7 FORUM FOR DIALOGUE WITH WOMEN LED BY DR. ANGELA MERKEL.

OPEN INNOVATION

IS GREAT.

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WHAT ABOUT INTERNAL READINESS?

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WHAT IS OPEN INNOVATION INTERNAL READINESS? LET’S TAKE A HYPOTHETICAL EXAMPLE AND IMAGINE A STARTUP THAT DEVELOPED A TECHNOLOGY WHICH ALLOWS A DEVICE WHICH IS THE SIZE OF A FEW MILLIMETERS AND DOESN’T REQUIRE A POWER SOURCE TO REPORT ITS POSITION FROM ANYWHERE IN THE WORLD WITHIN A 20 METER RADIUS. NOW, THIS STARTUP PARTICIPATES IN AN OPEN INNOVATION EVENT OF A LARGE TRANSPORT AND LOGISTICS CORPORATION, WHICH IDENTIFIES AN OPPORTUNITY TO ATTACH SUCH A DEVICE TO ANY OF ITS MILLIONS OF PARCELS AND CONTAINERS BEING TRANSPORTED WORLDWIDE AND THUS, HAVE MUCH BETTER CONTROL AND DATA COLLECTION OVER ITS ACTIVITIES. ANOTHER CORPORATION IS AN AGRICULTURAL WHOLESALER WHICH WISHES TO HAVE BETTER CONTROL OVER THE TIME IT TAKES PRODUCE TO GET FROM FIELD TO PLATE. THE STARTUP IN QUESTION CONSISTS OF MANY TALENTED PEOPLE, HOWEVER, THESE PEOPLE PROBABLY DO NOT HAVE ANY BACKGROUND IN AGRICULTURE, TRANSPORT OR LOGISTICS. MOREOVER, CHANCES ARE VERY HIGH THAT NO ONE IN THOSE STARTUPS HAS ANY FORMER FAMILIARITY WITH THE TWO MENTIONED CORPORATIONS AND THEIR INTERNAL WORKINGS.

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THIS MEANS THAT WITH EVERY GOOD INTENTION IN PLACE, THESE STARTUPS ARE CONSTANTLY IN A POSITION OF BEING OUTSIDE AND LOOKING IN AS THEY TRY TO DEAL WITH AN ESTABLISHED CORPORATION WITH ALL OF ITS INHERENT RESISTANCE TO INNOVATION ON WHICH WE HAVE WRITTEN EXTENSIVELY IN PREVIOUS ISSUES OF THE MAGAZINE. ORGANIZATIONS RESPOND TO INNOVATIVE OPPORTUNITIES SIMILARLY TO HOW THE HUMAN BODY DOES TO POTENTIALLY LIFE-SAVING ORGAN TRANSPLANTS. IT’S AS IF A CORPORATE IMMUNE SYSTEM KICKS IN AND DESTROYS THE OPPORTUNITY AS A MEANS OF PROTECTING THE ORGANIZATION FROM ATTEMPTING SOMETHING NEW AND UNFAMILIAR.

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For open innovation there are certain specific scenarios we encounter frequently that cause any such opportunity to stop dead in its tracks. Here are some of the most common: THE DAY AFTER THE PILOT - This is a classic case of

corporations focusing on the front end of the process and dedicating attention to the exposure stage, selection of most promising startups and a few weeks of attention until a pilot is created. The problem is that pilots are usually just scratching the surface of a corporation and the really hard part begins the day after the pilot. Most corporations simply aren’t ready for this effort in terms of the required skill set and a lack of motivation that its employees have to take on such challenging and risky endeavors.

SENIOR PERSONNEL LACK OF AVAILABILITY - Corporations are filled with very busy people. The more senior the people the more busy they are. Startups on the other hand have a very limited runway for takeoff and every passing day brings them closer to the end of that runway. When a startup related opportunity requires the assistance of a senior executive and the meeting is scheduled for two months later, this is just one of the many early signs that the opportunity is going to end on a sour note. LEGAL OVERLOAD - The legal aspects of cooperating

with established corporations usually involve thick “standard” contracts or lengthy NDAs (Non-Disclosure Agreements) that have been formulated over the years to cover every possible base for corporations that simply wish to protect themselves from potential litigation. Once again, this is not okay when dealing with startups that do not have the manpower nor the access to legal resources for such purposes.

PROCUREMENT SETBACKS - When a corporation decides to pay the startup for its time investment in the pilot (a common practice), it is not uncommon to see a lengthy procurement process that exhausts what is usually a very small and young company. As stated above, startups live on borrowed time and delaying the start of activities until a standard procurement process is completed is another major mistake that

corporations with good intentions make. This is simply how things are done over there. However, this practice is detrimental to open innovation efforts.

SO WHAT SHOULD CORPORATIONS DO IN ORDER TO DEVELOP INTERNAL READINESS FOR OPEN INNOVATION? THE ANSWER CONSISTS OF THREE ASPECTS: AN ORDERLY PROCESS - When a corporate employee

identifies a startup that could become an opportunity within the context of this corporation (for example, the tiny tracking device serving to follow individual fruits and vegetables from field to plate) then this becomes an innovation project that goes through a well-defined process with clear decision gates. This cannot be left to improvisational efforts that simply believe in the good will of corporate citizens. It has to be a controlled, measurable and manageable process.

A SUPPORTING INTERNAL COMMUNITY - We tend to use the

term ecosystem to describe the external environment of startups, corporations, academia and the relationships between them. For open innovation to thrive in an organization, it must have an internal innovation ecosystem as well with a supporting cast consisting of innovation coaches, champions and mentors. This eliminates the need from any single central figure to be at the center of every opportunity and creates a distributed network that allows open innovation to take place at scale.

INVOLVEMENT OF KEY EXECUTIVES - For open innovation to

generate clear, valuable outcomes, every organization has certain key executives that must be involved in the innovation process. We must always remember that when an executive makes the decision to take a startup-related opportunity and create a first version of a product or service as part of a unit’s work plans this has to come at the expense of something else that is of a much lower risk level and whose impact is much clearer in the outset. In order to get executives to make such a decision, there are very specific ways in which they must be involved in the process. This involvement has to generate maximum effect while requiring as little of their time and attention as possible.

IN SUMMARY, OPEN INNOVATION HAS MANY SIMILARITIES WITH INTERNAL INNOVATION SIMPLY SINCE INTERNALIZING A STARTUP TECHNOLOGY INTO A CORPORATION AND GENERATING PRODUCTS AND SERVICES BASED ON THAT STARTUP, IS ESSENTIALLY LIKE TAKING AN INTERNAL IDEA THROUGH AN INNOVATION PROCESS. THE TECHNOLOGY THE IDEA IS BASED ON IS SIMPLY BASED ON A STARTUP TECHNOLOGY AND THE OPPORUNITY’S SUCCESS DEPENDS ON HOW WELL THE ORGANIZATION HANDLES ITS INTERACTIONS WITH THAT STARTUP ON ONE HAND AND ITS INTERNAL ABILITY TO HANDLE THE OPPORTUNITY ON THE OTHER.

WHAT ABOUT YOUR ORGANIZATION? ARE YOU INTERNALLY READY FOR OPEN INNOVATION?

Edo Segal Open innovation lead at Amdocs Israel

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innovation at Amdocs

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By embracing open innovation, we connect customers’ business aspirations with startups’ technologies, delivering value to all, faster. Everyone wins.

We reached out to Edo to learn more about open innovation at Amdocs, a leading software and services provider to communications and media companies When companies establish open innovation programs, they usually involve multiple external players such as startups, partners, customers and so on. How is open innovation pursued at Amdocs? At Amdocs, we leverage best-in-class open innovation practices and methodologies to drive full innovation cycles, from ideation, validation and experimentation to commercialization of solutions, taking a two-pronged approach: On the one hand, we regularly search for partner technologies that can enhance our portfolio to deliver more value to customers of the Amdocs group. On the other hand, we work with group customers to address their company-specific challenges. We look to open innovation as one of the ways to address these challenges. Together we define them and then identify startups that can assist in addressing them. As part of this, we have several programs that help us identify relevant startup technologies:

Startup fast-pitching events We have numerous sessions with customers throughout the year, typically with CxO and VP level executives. During these sessions, we discuss how we can collaborate to drive innovation and expose them to startups that may interest them. Before meeting the customer, we help startups fine-tune their pitch based on our familiarity with the people they are going to meet.

Executive challenges An executive business challenge is defined together with customer executives to address one of their key challenges. It is then crowd-sourced to all Amdocs employees, as well as to our ecosystems of partners and startup communities. We tailor the challenge to the customer’s business need in terms of target audiences, duration, judging committee and prizes. The final solution may contain ideas from employees, partners and startups.

Ad-hoc business challenges “Inbound” requests received by the Open Innovation team from the Sales may help address specific customer challenges. Solutions can then be further leveraged to help other customers and to enhance our portfolio.

Joint innovation centers with customers Joint innovation centers with customers is a more strategic and structured way to bring innovative technologies and solutions to specific customers. Business stakeholders at the customer provide business challenges. For each challenge, we look at a few alternative solutions to identify the right startup that can either solve or mitigate the issue. The business stakeholder will then select the solution that will continue to the Proof of Concept stage.

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This process is built to allow for short time-to-value. In all these programs, our mission is to bridge the gap between leading communications and media companies, and startups. We assist startups in communicating more effectively with these large organizations and speak to the right business stakeholders directly about their specific business needs. We actively assist them in defining and formulating the PoCs, KPIs, and go/nogo criteria.

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So far we’ve discussed activities that are usually initiated by customer needs and challenges. Do you also reach out to customers with innovation opportunities? Yes. We have several such programs. Amdocs has been at the forefront of innovation in the communications industry for more than three decades. Our ability and determination to look ahead and come up with the solutions that customers of the Amdocs group will need tomorrow is key to our ongoing business success and strong customer relationships.

Launchpads We analyze long-term future trends and opportunities. We start by researching and exploring a selected domain and the relevant ecosystem of startups, partners, experts, thought leaders, VCs, academia and professionals. We then bring them all together to take the stage in an event we call “Launchpad” in which they share their vision with a crowd of around 100 professionals, most of them being relevant Amdocs employees which we “cherry-pick” in advance. This event kicks off the ideation and incubation of innovative solutions in collaboration with customers and partners. The processes you describe have great potential value for Amdocs. Very true. They help us further strengthen our position as a trusted partner to customers, allowing us deep insight into their challenges and creating the solutions that can offer them the most value. Can you share any data regarding the outcomes of open innovation at Amdocs? We see hundreds of startups a year and maintain a working catalog of about 200 which we share with Amdocs group customers. We create hundreds of opportunities every year for startups to pitch their offerings to business stakeholders in the communications and media industries. We have patents and products that were created as a result of our open innovation programs.

How is someone in your role measured at Amdocs? What does success look like? Among the metrics that are easier to measure are the number of customer engagements we lead as part of our various open innovation programs and the number of PoCs generated. The number of solutions we propose as add-ons to our portfolio of products and solutions is an additional metric we measure. Clearly, there is value that is harder to measure; for instance, the knowledge we continually feed into the company and into customers around new technologies and solutions, helping to elevate our positioning as an innovation leader and a trusted advisor and thought leader.

AHI GVIRTSMAN IS THE FORMER VICE PRESIDENT AND GLOBAL HEAD OF INNOVATION OF HP’S SOFTWARE DIVISION, THE AUTHOR OF THE BOOK “THE PEAK INNOVATION PRINCIPLES” AND CHIEF KNOWLEDGE OFFICER AT SPYRE. HE IS CONSIDERED A GURU OF ORGANIZATIONAL INNOVATION AND HIS METHODS ARE BEING APPLIED IN VARIOUS ORGANIZATIONS INCLUDING VODAFONE GERMANY, ORBIA, AND THE MUNICIPALITIES OF TEL-AVIV AND JERUSALEM

The secret killer of corporate innovation

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Lack of operational fit

THROUGHOUT MY CAREER I HAVE SEEN SEVERAL VENTURES THAT WERE MUCH NEEDED; CUSTOMERS EXPECTED THEM, MANAGEMENTS LONGED FOR THEM, AND YET THEY PERISHED AND DISAPPEARED. THE REASON? A LACK OF OPERATIONAL FIT OF THE VENTURE TO THE ORGANIZATION AND FAILURE TO TAKE STEPS TO MAKE IT WORK.

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Remember that once upon a time, actually about a year ago (even less) we used to fly to other countries? Many of us used to pack a universal power adapter so that no matter what country we arrived in, our appliances would work. The adapter was required in order to make the appliance work in an environment which wasn’t natural for it. Innovative ventures, by definition, have a high risk of failure. Even if successful, their impact on the organization’s KPIs (e.g. revenues, profitability, and customer satisfaction) is not clear in advance. Additionally, such ventures usually demand that certain key functions in the organization start doing things differently in order for the venture to be implemented. Similar to our universal adapter analogy, such ventures are foreign entities in established organizations. This means that regardless of how enthusiastic management is about them and the positive impact they could have on business outcomes, they will eventually perish. The reason is a silent killer that lurks within every organization and, without too much noise and fanfare, suffocates such maladapted ventures.

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AN EXAMPLE OF THIS IS A SOFTWARE PRODUCT BUILT FOR SALE IN THE CLOUD, IN AN ORGANIZATION THAT UNTIL THAT TIME WAS USED FOR SELLING SOFTWARE PRODUCTS INSTALLED ON THE CUSTOMER’S PHYSICAL SERVERS AS PART OF THE DATA CENTER. THE SALESPEOPLE IN THE ORGANIZATION KNEW HOW TO CLOSE LARGE DEALS IN A PROCESS THAT WOULD TAKE MONTHS, AND THEIR COMPENSATION MODEL WAS BASED ON A CERTAIN FLOW AND SIZE OF DEALS. WHEN THE SAME COMPANY RELEASED A SOFTWARE PRODUCT DEPLOYED IN THE CLOUD, NOT ONLY DID THE TECHNOLOGY CHANGE - BUT ALSO THE BUSINESS MODEL. INSTEAD OF DEAL SIZES FROM HUNDREDS OF THOUSANDS OF DOLLARS TO MILLIONS AND SALES CYCLES THAT COULD TAKE UP TO A YEAR, THE SALESPEOPLE NOW HAD TO CLOSE A LARGE NUMBER OF SMALL DEALS, WHICH REQUIRED THEM TO HAVE SKILLS THEY DID NOT NECESSARILY HAVE. ADDITIONALLY,, THE BILLING MODEL WAS NOW SUBSCRIPTION-BASED INSTEAD OF A ONE-TIME PAYMENT. TO MAKE MATTERS WORSE, INTERNAL SALESPEOPLE WERE MEASURED BASED ON THE OLD MODEL AND NOT MAKING NUMBERS AS A SALESPERSON MEANT YOU’D HAVE TO FIND A NEW PLACE OF EMPLOYMENT. THIS MEANT THAT SOLVING THE COMPENSATION ISSUE ALONE WAS NOT SUFFICIENT. BOTH THE COMPENSATION MODEL AND THE PERFORMANCE MODEL OF SALESPEOPLE WERE NOT SUITABLE FOR THE INNOVATIVE NEW PRODUCT.

How should you deal with this? The answer is by using a tool called “operational fit”. The purpose of this tool is to identify in advance the points at which there is a mismatch between the organization and the new innovative venture that it is working on. When I accompany organizations in promoting innovative ventures, I ask them what organizational function’s behavior will need to change in order for the venture to be implemented and reach customers. Think of a new technology that an insurance company would like to incorporate into its customer service. The technology is expected to increase the success rate of the customer service retention team. However, the average call time is expected to lengthen due to this technology being applied, and in addition, it is a tool that requires training. Let’s take two organizational functions, for example: Customer Service Team: Naturally, this team will be the one to make use of the new technology. IT department: The department staff will need to know how to install and maintain the technology. They may

also be responsible for explaining to customer service personnel how to use it. Let’s see whether each of these functions has the skill and motivation to work in line with the venture needs. In the case I presented, the customer service team does not have the necessary skill and the organization will need to provide appropriate training. What about motivation? If we examine what the team’s goals are and how they are measured today, then we will know if there is a contradiction between the current way of measuring and what the team will be required to do when the new technology is assimilated into the organization. If we identify a contradiction, it means that we have within the organization a factor that without malicious intent will still harm the success of the venture. This is because people behave based on how they’re measured. How do you deal with such a contradiction? Suppose we find that customer service is currently measured, among other things, on the average length of calls that should remain within a certain range. The technology, as mentioned, will extend the average call duration, but will also increase the success rate in customer retention. If so, we will need to coordinate this with the team managers and lengthen the range of the call duration that the team members will have to maintain in order not to be harmed in their evaluation as a result of the standards of the new technology.

WE USE THE “OPERATIONAL FIT” TOOL AS A KIND OF A UNIVERSAL ADAPTER THAT ALLOWS A CONNECTION BETWEEN AN INNOVATIVE VENTURE AND THE ORGANIZATION IN WHICH WE WANT TO IMPLEMENT IT. USING THIS TOOL AT A RELATIVELY EARLY STAGE OF THE VENTURE CAN SAVE A LOT OF HEARTACHE DOWN THE ROAD. THE STRENGTH LIES IN THE FACT THAT IT DOES NOT DEAL WITH VISIBLE ORGANIZATIONAL BARRIERS, WHICH ARE RELATIVELY EASY TO IDENTIFY, BUT WITH QUIET BARRIERS THAT, IF LEFT UNADDRESSED, WILL CAUSE THE VENTURE TO SLOWLY PERISH WHILE THE REASON STAYS DIFFICULT TO DETECT.

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In fact, the organization found itself trying to bring a new product into the world that was supposed to be strategic for it, while at the same time using a compensation model that suppressed any motivation for salespeople to sell it. The result was that they continued to encourage sales of legacy products instead of the new ones.

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Rinat Guy is Chief Innovation Officer at the Tel Aviv-Yafo municipality. We asked Rinat to tell us about the innovation program she runs and the fascinating story of how it came to be.

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Municipal innovation

The story of a municipality’s systematic approach to innovation in Tel-Aviv

In recent years, the management of the Tel Aviv-Yafo Municipality, Israel’s cultural, business and nightlife center and 2nd most populated city, headed by Mayor Ron Huldai, has been leading a move to assimilate innovative thinking into daily work at the municipality. We are not talking about innovation to make a nice impression, nor is it innovation created in conference rooms in Tel-Aviv’s magnificent towers nor from Silicon Valley laboratories. It’s innovation born out of real needs, real challenges and mostly from listening to what’s happening on the ground, created from employees, from people and for people. We have become an organization that asks questions about how one can innovate and what can be done differently to get better. This isn’t about technology because innovation is not just technology. It is a different form of thinking and looking at problems, thinking about the existing out of a desire to improve it.

Six years ago I was working for the municipality as a cross-organizational project manager. When I suggested to the city administration that we set up an innovation program for employees the reactions were very doubtful such as: “We love innovation, it’s just a pity there is no budget”, “We are doing so well, so why change?”, or “This will be a waste of time” .

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Finally when the mayor realized I would not give up he told me “You now have a new project. Build a plan for innovation, but without a budget, without dedicated manpower and without tools and do not forget your current work since this is in addition to your current role. So it took me almost a year, and I studied the subject in Israel and abroad, in academia, in business and public bodies. The one person who believed in me, was Ahi Gvirtsman, an innovation expert who was at the time, VP of innovation at HP and is currently the co-founder and CKO of Spyre. He was always happy to advise me,

help me and kept telling me not to give up because when innovation is introduced there will be cynicism, disregard, ridicule and that it is part of the process and this dream I have must not be given up. Another thing that he helped me with was the methodology that he devised which I was able to use as the basis for my work. After a year, I came to the conclusion that innovation is not a project that begins and ends. Innovation is not a slogan, innovation is a way of life. The way to change and improve the lives of all of us, our community, the way we see reality. So how do we do that? How do you innovate in a complex bureaucratic organization with 15,000 employees? The Tel Aviv Municipality encourages innovation in various ways. We harness the resources around us to improve the quality of life in the city. We started with our human capital - the workers. We believe that innovation starts with people and that employees are a source of inspiration for innovation. The innovation unit has developed the ITAY (Innovation Tel Aviv Yafo) model which is a groundbreaking urban model. A diverse human cluster (employees, teachers, students, researchers, residents) collaborates around joint initiatives that address the challenges of the city and community with a focus on strategic innovation, internal organizational innovation, educational innovation and open innovation. We started with the employees. I believe that every employee has the ability to innovate, change and create added value. Employees get a firsthand experience of the problems and the needs and they are the ones who can also invent great innovative solutions. We just need to create the conditions to allow that to happen. We just need to offer them a platform. The goal was to reach out to all city employees and encourage them to come up with creative ideas for the benefit of city residents. But how do we reach 1,000 employees? We have trained innovation ambassadors. We selected 30-40 creative and motivated employees who were suitable to be agents of change. We conducted the same course of 8 sessions in which they were exposed to a wide range of approaches / techniques for dealing with urban challenges. Content such as Design Thinking, Lean Canvas, Systematic Inventive Thinking (SIT), Presentation skills and standing in front of an audience and much more. Today we have 194 innovation ambassadors whose job it is to be agents of change in their units and encourage their colleagues to think of creative solutions for the well-being of the city’s residents.

The change in perception of this model is that the municipal management presents the challenges and the employees themselves bring the solutions. Once a year we hold an innovation competition. Employees take the stage and present their TED-style ideas in the presence of the mayor, city council and 500 guests. Good ideas get a budget for pilot implementation. If successful the pilot will expand the venture and replicate it to more places in the city. So far 22 ideas have been fully implemented and 5 more are in advanced stages of implementation. The process is systematic and not one-time. It is a radical act that we have only benefited from and it is an organizational culture that every organization can and must in my opinion adopt. A particularly exciting example was the “John 4 On” project - the integration of students with complex disabilities in the world of employment, which won second place at our Urban Innovation Conference in November 2019. The project was conceived by an art teacher, who participated in an innovation coaching course, from the On School, which is a rehabilitative social educational framework for students with cerebral palsy (C.P) and complex disabilities. The project for the senior class (18-21) has been successfully implemented and takes place in a variety of unique workshops, with 15 students participating, some of whom are approaching adulthood. The purpose of the project is to prepare students for professions in the market as well as to help prepare work portfolios that will assist in finding a suitable job after graduation. The workshops are held with the help of volunteers from various fields - product design, fashion design, architecture, building computer games, etc’. Some of the volunteers themselves have disabilities or are parents

of children with disabilities and beyond practical learning, there are also lectures on how to handle clients in the various professions and how to manage and work in an office so that students can integrate into the labor market as easily as possible. We started with the employees and we continued with residents, with primary school teachers, special education, with kindergarten teachers and we have a partnership with Tel Aviv University. The “Tel Vekach” project - a community object library allows you to borrow practical, space consuming items such as a drill, a cage for cats, a baby seat and return it when you finish using it. This saves our city’s inhabitants money and also precious storage space in the apartment. We are in a constant process of encouraging creativity and different ways of thinking among employees, teachers and residents. The projects come from completely different content worlds, yet they all try to solve urban problems or community challenges in new and fresh ways. We cultivate a supportive atmosphere for startups. In the city of Tel Aviv-Yafo, there is the highest concentration of startups in the world per capita. At any given moment, there are about 1,700 companies operating in the city. City management is promoting policies to help startups and reduce taxation. We have established 7 urban workspaces in one of which we are also located called “Cityzone”. Here we host startups that can apply their technology to urban challenges as a Beta site and test it for up to a year. There is a large field of experiments here on urban issues in collaboration with Tel Aviv University and the municipal Atidim company.

What Tel-aviv’s innovation program has produced in recent years demonstrates that only those who are deeply familiar with the needs and challenges - can come up with excellent answers. The freshness of the city of Tel Aviv - Jaffa is not only in its streets. It actually seeps into the corridors of the city’s municipality and “infects” everyone there with great enthusiasm. Tel-Aviv’s nickname is “A city that never stops”. It has now become a city that never stops renewing itself.

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Over 3000 employees have actively participated in the program. Over 100 ideas are submitted every year. Annually, about 10 workshops are held, dedicated to the needs of various units. 3 courses of innovation ambassadors a year

ROY AVRAHAMI, HEAD OF STAFF AT ASHDOD PORT COMPANY, ISRAEL’S LARGEST PORT, HAS BEEN DRIVING AN OPEN INNOVATION INITIATIVE AT THE PORT OVER THE LAST COUPLE OF YEARS. WE GOT THE CHANCE FOR A QUICK INTERVIEW TO LEARN MORE ABOUT PROMOTING INNOVATION IN COMPLEX ENVIRONMENTS.

From port

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Port of Ashdod innov

t to portal

vation in 60 seconds

The port of Ashdod has been Israel’s largest port for many years, its main point of entry for goods. What sparked the decision to innovate? The Israeli port authority is currently undergoing significant changes with the entry of two international port operators, both private and competitive players. The Port of Ashdod Board of Directors has decided that if until now the Port of Ashdod was the largest port in Israel, it will now become the smartest port in Israel mostly in its customer service.

What is the impact you expect innovation to have on the port of Ashdod? What is your innovation strategy; i.e. the way you intend to achieve this? Innovation will streamline port work, increase productivity and most importantly transfer employees to a mindset of innovation and competitiveness. In addition, innovation will be an additional source of income for the port, in that the port will invest in startup companies for partial ownership while helping to distribute them among the various world ports. The goal is for the port of Ashdod to become a technological hub of seaports. The port will establish innovative embassies in all the world’s ports and through them it will be able to export and import startups.

What was the factor that engaged the management team and directorate in supporting innovation efforts?

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The realization that if you do not change, innovate, streamline and reinvent yourself according to the changing reality in a competitive world, you become an irrelevant player.

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What outcomes have you been able to achieve over the 18-24 months since innovation activities began? We currently have over 30 startups operating across the port. In addition, we established an accelerator with an international operator who will locate and train startup companies from the seed phase and help them develop to the sales phase. At the same time, we have created strategic collaborations with Israel’s national cyber directorate, the Ministry of Energy, and the applications and technology department within Israel’s ministry of defense. The vote of confidence demonstrated by the international accelerators is the key indicator for us that we are going in the right direction.

One of the toughest things about working with startups is usually integrating their technology into existing processes and team habits having to accommodate existing skills and motivations. How do you manage to get the cooperation of people in the field? The main idea is not to go around the existing knowledge and experience, but to involve it in the process, allow the port’s existing experts to test the technology for themselves, ask questions and even be the leaders of change. The sense of control and empowerment among these innovation agents makes them the best ambassadors of such new technology. Moreover, the knowledge gained so far has great value in future implementations of any externally sourced system and even identifies additional needs that the startup company was not initially aware of.

What advice can you offer to those who are just starting to drive innovation in their organization? My approach is to take action, establish bridgeheads in the field and figure things out along the way. In practice, you are driving the assimilation of innovation yourself and must act with a lot of audacity, courage, and convey that you know what the final picture is (even if this isn’t necessarily the case). It is important to find your key partners and work closely with them. This doesn’t necessarily mean you do what they say, but it is very important to listen and work in coordination.

What is the vision for innovation at the Port of Ashdod? How does management see innovation affecting it 5-10 years from now? The Port of Ashdod will be a significant player in the startup community that specializes in seaports, logistics, cyber, energy, etc. The port will be transformed from a port into a portal of technologies. The port will establish innovation embassies in various ports around the world and will be a magnet for knowledge, a sandbox for innovative technologies and initiative, and will extend a blue ocean of opportunities for startups.

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The

kitchen An interview with Dagan Eshel, VP innovation at Strauss Group

Tell us about Alpha Strauss and the work that you do Strauss has been innovating for many years but started doing so in a systematic fashion around the year 2000. It has traditionally been incremental innovation or product innovation that could introduce enhancements to the products and portfolio. When we started looking for ways of innovating in a more significant way we realized that we had to have a novel and more ambitious approach.

Our challenge was that it had to be a lean approach since the budgets available to us weren’t close to what international conglomerates like Nestle could afford to spend. We decided to leverage our location at the heart of the startup nation and thus, establish a new local market that is labelled foodTech but our unique approach was that we defined it as any technology that could introduce innovation in productivity, quality, product edge and sustainability from field to plate. The uniqueness here was that we determined that regardless of the field the startup considers itself to be in whether it is a technology originally developed for medical devices or defense, if it could potentially contribute anything to the food industry through one of those four pillars in the process from the field to the home of the consumer then we considered it to be foodTech. When we started looking at the Israeli market through this lens i.e. entrepreneurs, scientists, startups, patents and so on and researched it we discovered numerous opportunities in the market. In addition, we realized that many of those who had potential to innovate in foodTech weren’t even aware of this fact. Also, if these people did have an idea of how to get funding, support and mentoring in other industries there was no such knowledge and experience with regards to foodTech.

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And so, the next question was how can we make a move that will cause all of those actors to want to connect and start working with us. In traditional open innovation, companies formulate some sort of a brief about what they’re looking for, publish this brief in various channels and invite relevant actors to connect and work together on their ideas. What we said was that since we were making a long-term move to create a new industry and that since it did not exist at the time and we couldn’t really define something specific we were looking for we simply invited the various actors to come talk to us so we could create this market together.

We asked startups to not just tell us what they could potentially do for us but also to let us know what we could do for them. There are various ways in which a corporation can help startups in ways that do not incur direct costs and at the same time are very valuable to the startup. For example, an entrepreneur can be a technical wizard with zero marketing talent. In such a case, we can get this person some time with a marketing expert from Strauss and that creates real value for the startup. We can give them access to our factories in order to understand manufacturing processes. We can give them access to our international partners. You might ask me at this point whether my team and I are philanthropists. The unequivocal answer is “No” since we simply wanted to make it clear to the ecosystem that if you had an idea or a technology that could benefit the foodTech industry then Strauss is the company you should reach out to. So in essence, you created value for startups and made it broadly known so that you would attract actors in this nascent foodTech industry who could benefit you as a corporation long term. Exactly. This was our first move. The second move we did was to work on the organization itself in order to make it more receptive to these potential innovations. We knew that it would serve no real purpose to do all this work if nothing substantial could come out of these opportunities involving Strauss itself. This involved persuading various stakeholders in the organization that it would benefit them to work with us so that we get higher interest levels and better cooperation. We also had to make certain procedural adjustments with regards to working with startups. One example would be the NDA (Non-Disclosure Agreement) that we had to sign with a startup that in most organizations is very long and with fine print. When entrepreneurs with no resources see such a document they realize that this will require a lawyer which they cannot afford. We were able to reduce that into a page and a half and using a large font. Another example would be payment schedule which can get to 90 days from the date of issuing the request. For entrepreneurs

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we were able to bring this to almost an immediate payment schedule. And so initially, we were a sort of a matching service, getting exposure to ideas and technologies and turning them into structured proposals to the various companies of Strauss. We were not looking to invest in startups at the time. We had hundreds of meetings and generated dozens of projects so this was a successful beginning. After about three years of doing this, we realized that a lot of potential was still not being capitalized since many of the opportunities we were seeing were based on early stage startups and at the time, we didn’t have ways of dealing with technologies that were at such early stages.

What we did was to found “The Kitchen” our FoodTech incubator which is part of the same vision of turning Israel into a FoodTech valley. The Kitchen brief is to work with early stage startups with funding that is received from Israel’s chief scientist office. Since the funding involves public sources, the purpose of “The Kitchen” is to nurture foodTech startups regardless of whether they’re creating something that Strauss can use. It also invests in startups in return for equity. A more recent development is that we began to look for solutions worldwide to broad issues that Strauss is looking to solve. For example, we know that lowering the sugar content of our products is a long term issue and so our CTO scans the globe for early stage solutions that can be brought into Strauss through working with us. In addition, what I do personally is to look for business development opportunities that can be nurtured and then connected to Strauss’s business units. What would you say were the top 3 things that you didn’t know about startups and had to learn on the go besides what you already mentioned? The first thing is to realize that entrepreneurs are “free spirits” oftentimes and that when someone from a corporation meets them this person has to have a tolerance level to such communication style

and behavior. It also demands a certain level of humility. Our CTO is a professor of food engineering and at times he can step out of a meeting and tell me “This is different from what I have learned but what this person says makes sense”. This holds for the innovation manager but also for other stakeholders that might be involved. It is very difficult, close to impossible actually, to hold the following two questions in our minds at the same time: Will this really work? If it works will anyone actually care? And so we decided to assume that for the first few meetings, everything the startup is telling us is true and that the presented technology is going to work. We focus our attention on the second question, assuming that the technical aspects will be clarified and tested later on. Otherwise, it is very difficult to make an educated decision about the second question because doubts about the first one keep getting in the way. Our second learning is that when startups meet a corporation they usually mix between the technology they have and its application. Our answer right from the outset is: “You created a technology and that is your expertise. Our expertise is the familiarity with the market so focus on presenting your technology and let’s brainstorm together on what its most promising application should be”. Lastly, as in most entrepreneurial projects, the nurturing and execution of such joint opportunities with startups usually take more time and require more budget than planned. The corporation should realize this and understand that it is part of how these activities go. For innovation managers this also means that the way they’re measured should be adjusted according to the stage they are in. In the beginning, they should be measured on input i.e. the number of startups that were interviewed and the number that were pursued. This can be sufficient for a year and maybe even two. Then, you should add the number of projects that were generated out of these startups i.e. projects where business units actually dedicated time, funding and attention. Only after that, should you start measuring the impact on business KPI’s.

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OPEN INNOVATION An interview with Mey Jacobson, Innovation Community Manager at Netivei Israel, Israel’s national transport infrastructure company.

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In the last two years, Netivei Israel has run two open hackathon events, and a startup pilot program that you were in charge. As a result of that you have generated six final candidates and three pilot projects sponsored by the CEO and funded by Netivei Israel. It is quite a lot for an organization that is part of a very conservative industry. Tell us how all this came about. “It is a bit odd when one thinks about it, but when we started, there wasn’t any formal strategy about open innovation. Even the term “open innovation” is something that you and I are discussing, but to this day, it is not an official goal of the organization. Our leadership was talking about its wishes to open up to the outside world. We knew there was much activity out there, and we just wanted to have an experience and see what we could learn from it. The hackathon was a great way to do it instead of having a long term plan that would cost a fortune, take forever to approve and get much resistance. What worked very well for us was to start small, show value and outcomes, and then repeat. This is how we transitioned from simple hackathons and into an acceleration program with trained internal mentors and substantial business-impacting issues. In short, I think we can say that we aren’t an organization that planned to do open innovation. We are an organization that just did it.”

One would expect a conservative company like Netivei Israel, a state-owned enterprise, to have a very structured plan for such developments. You’re saying that this was more of a bottom-up effort. “Correct. I like to use the term “Guerilla Activity” since what we did was to recruit various stakeholders in the organization and ask them for simple contributions that they enjoyed providing. For example, we hired mentors, provided them with basic mentorship training, and invited to meet the startups as part of a hackathon event. They get a great personal experience, startups get access to knowledge and professional expertise, and Netivei Israel gains credibility in the Israeli ecosystem. We didn’t even set long-term expectations with mentors. We kept inviting them to various activities they enjoyed and gradually won them over and were able to get a greater commitment. The CEO was aware of this approach and endorsed it as he was mindful of how complicated and costly the top-down approach would have been at that early stage.”

What sort of activities did you take up to generate higher levels of internal readiness for open innovation? “The CEO was very involved from the start and openly declared that the hackathon will take place. At the hackathon, he announced the launch of the pilot program. He regularly spoke about the innovation activities during management meetings and also invited me to present the activities to the management team, which enhanced my credibility since I didn’t have an official innovation role at the time. Another great sponsor was the head of the Spokesmanship Department. Once you have senior enough sponsors, the company falls in line with what they demand. The mentors, which I mentioned before, were another critical element in my ability to prepare the organization for actually working with startups and generating successful pilots.” Tell me more about the mentors. Do you consider their contribution to successful pilots to be major? “Absolutely. I am not a professional authority within the company. I am the glue that brings this all together. However, mentors are also essential in taking startups from vague potential into real opportunities. Without their professional background, we would never be able to generate opportunities in a language that the organization and its decision-makers could understand and appreciate.” Beyond professional knowledge, what about the procedural functions that traditionally stifle innovation such as legal, regulations, finance, IT, etc’. How did you get those on board?

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“We generated outcomes and a lot of positive buzz. Once management began expecting this “Guerilla” style activity to become a more official part of the company’s practices, we started getting support in various ways. For example, the legal department was able to find legitimate means by which we could fund the pilot projects. Another example is the support we are getting from the department, which is in charge of contracting suppliers, to have a way of publishing an official tender offers that suits this pilot program and is friendly to startups.” People reading this interview who know who you are, where you were two years ago when you just started, may think that while your “just do it” approach seems appealing, in a conservative company, it might cause harm. What would you say to them?

“To clarify, “just doing it” doesn’t mean you go at it alone. From the earliest stages, you must have key partnerships in the form of sponsors and stakeholders who will help you move forward. These should be people with the connections and influence that allow you to go ahead and do it. In addition, you should get great external advisors, like the ones I had, who have experience in driving corporate innovation and involving other people internally to gain support and have a network that is helping you”.

to run a pilot, six months in the activity. We thought it wouldn’t be fair for the startup to send them to the innovation authority at that point in time and have them go through another due diligence. Moreover, we had to think about the implications of such a tedious process on future startups wanting to collaborate with us.”

What other advice do you have that could help increase the chances of success? “You have to tie the activity to a central organizational purpose. Make sure that you are harnessing this project to something that leadership truly cares about. There has to be a real need that you are addressing through the events you run. This clarifies to everyone involved the purpose of doing it. Set yourself up for success by setting up an ambitious yet achievable definition of success. In addition, make sure that the first event you run is a success. Even if it doesn’t generate tangible outcomes, besides the event being fun and enjoyable, then it will leave a positive memory and a curiosity to have more. In our case, the need we addressed was that the Israeli Ministry of Finance sent a directive requiring Netivei Israel to have an innovation department within a certain amount of time. Naturally, a traditional consultancy analysis was performed with a very distinguished consultancy firm that generated many slides, describing a long-term plan that would never have succeeded in an organization like ours. The need I was able to address was to start moving in the right direction and be able to comply with the government’s directive eventually. This was a high priority for our CEO and management team.” Tell me more about the activities and what they were able to accomplish “Our recent hackathon was a national one, in cooperation with other major players in our transport ecosystem, such as Netivei Ayalon, Israel railways, Kvish 6 & Yefe-Nof. Our partners in this event set the challenges, offered their mentors to startups, and I know of several connections that were made, and turned into projects. We also started an Innovation Lab at Sapir College and the Technion. We are the first state-owned enterprise in Israel to fund a pilot with a startup. This was an unprecedented decision that was driven by our CEO. In the beginning, we thought about getting the funding for pilots from Israel’s innovation authority. However, we decided

What do you see as the activities’ next stage of development? “First of all, starting January, Netivei Israel will have a new Innovation VP, and I‘m sure that as a result, innovation and R&D activities will receive a much broader scope. I’m excited and looking forward to this development. With regards to the innovation community, several projects have started this year and are scheduled to continue into next year. From where I’m standing, it looks like the community activities at Netivei Israel should mature into something that involves the broader workforce and not just a selected few. These activities are very exciting both at the company level and for me, personally. The potential of connecting the knowledge, expertise, and execution power of Netivei Israel with the different mindset of the entrepreneurial world and startups is driving the company to continue investing in startup relationships through exposure events, joint projects, and ongoing personal contacts.”

An interview with Avi Zooaretz, Director of intrapreneurship at Orbia, a global corporation of more than 20,000 employees.

Group genius

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intrapreneurship impacting tangible outcomes at Orbia

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Please describe the main goals of the intrapreneurship program at Orbia. When I look at an internal organizational innovation program I always focus on two main goals: 1. Creating an internal organizational culture of innovation. Thanks to the fact that over a long period of time the innovation program is implemented in the organization and thousands of employees experience it, a very special opportunity is created for employees to create and adopt an understanding of innovation. 2. Creating a financial effect through ideas that come from the employees . This is actually the most important goal in my opinion because creating a culture is nice but once you also produce sustainable projects that are embedded in the organization and produce a financial impact you actually get a boost from the management team to continue. In addition, the morale of the active teams lowers the potential opposition of employees who may not believe in innovation that much and most importantly you create a buzz of success that will eventually affect the culture as well. In summary, the creation of the innovative culture in the organization is an important thing (and difficult to measure) but the financial impact and creation of new ventures (embedded in the organization) is in my opinion the main goal of the program.

How do you provide the executive teams at Orbia’s various companies with high-quality innovative opportunities to impact their results? At first, I try to understand what the strategy of each organization is and in what fields of innovation the company wants to play. After understanding and analyzing the different needs and the strategic front of each organization, I begin to produce a list of potential challenges that I present to management and in collaboration with them we make a decision on what issues we want to address in the challenges we produce. These challenges are then what we use to solicit innovative ideas from our employees.

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By connecting the needs and the organizational strategy to the innovation program, we actually get a result that allows us to get very high-quality products and in addition connects the employees to the organizational strategy.

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What would you say was the main bottleneck you were able to eliminate so far in terms of getting to tangible results? To my delight there were not many bottlenecks due to the fact that from the first moment the field of innovation was part of the strategic planning of the then-CEO of the company Mr. Daniel Martinez. This was part of the organizational transformation he was trying to instill. At the same time, still as in any innovation program there are the usual difficulties of budget, resources, time of employees etc. However, the program we developed with the support of Spyre - Innovation ecosystem design, that included hundreds of innovation volunteers (we call them champions) a tight budget and a structured process helped us beat any bottlenecks we encountered.

One of the challenges of innovation project teams is the access that is required to various experts at the right time. How do you overcome this challenge? From day one as I mentioned above, we recruited innovation managers at each of Orbia’s companies. In addition, we recruited and trained innovation champions who help us push the program forward, and we have recruited subject matter experts who help us in the later stages of the process. In fact, subject matter experts are a critical component of our success since they are the ones who open the most complex doors for us.

For those who are taking their first steps as innovation managers, what would be your main advice? • Patience • A stubborn belief that in the end, if you persevere, it will succeed • Recruit a team of people who share the same enthusiasm • Work hard and fast! The goal is as I said is to produce impact, just having nice ideas is not enough and here your job as the director of innovation is to control the projects, ideas and processes and do what you can to implement them. And one last thing: Remember to enjoy the road :-)

What has been the most gratifying part of your role? There are two things that come to mind. The first is to hear an exciting story about employees who for the first time in their lives did something that excited them so much or something they have never done before. As an example, in our last project we had an employee who went through all the selection stages and the day before the presentation to the management he sent us a strange email and asked what to wear to the management presentation. We told him he should not dress specifically for the meeting but still we were curious and asked him about the source of the question. The employee answered that he has been working for the company for over 20 years and this was the first time in his life that he had a presentation!!! He simply did not know how to behave in such a situation. The second thing that always excites me is the fact that an idea you see at the beginning of its journey appears as a few lines of text on the platform and transforms six months later into a mature idea, assimilated into official work plans that can produce a multimillion-dollar impact on a company.

What steps can innovation managers take in order to show tangible results in relatively short periods of time? It very much depends on the organization. If it is an operations-driven organization then one can focus on continuous improvement and thus achieve a relatively quick financial impact in the form of cost savings. At the same time, I think the right and most accurate combination is to issue employee challenges that combine innovative projects that have a long-term potential impact with challenges that can bring about a very quick effect, such as operationsbased ones.

MEDIA@SPYRE.GROUP